Less debt burden at elite law schools

After the publication of Stanford Law Professor Deborah Rhode’s ’74 LAW ’77 new book, “The Trouble with Lawyers,” in June, debates surrounding the cost of law school tuition have returned to the national spotlight.

In her book, Rhode exposes many problems in legal education, ranging from the oftentimes excessive expense tothe marginalization of professional ethics. For instance, Rhode notes in her book that the average in-state tuition at a public law school has grown 1,000 percent over the past 25 years.

Rhode told the News that many of the problems identified in her book — particularly those of unmanageable tuition costs and resulting debt burdens for students — are applicable to elite law schools such as Yale’s. But law school administrators interviewed said the problem is actually less severe at top universities, due to school-specific loan repayment programs and better job prospects.

LOAN FORGIVENESS

While graduate students receive stipends from their universities to cover their cost of living, law students usually finance their expenses through loans. Loan forgiveness programs at law schools ease the burden of these loans.

According to Jill Stone, Yale Law School’s director of financial aid, the school’s tuition fees have increased between 2 and 3 percent annually over the last five years. However, Stone added, the rising fees were matched with scholarships and loans which increased at the same rate. Currently, the average student loan debt at the law school, which is roughly $122,000, is lower than the nationwide average debt for both public and private law schools combined, Stone added.

Stone said debt is inherent in the way law schools are structured, and that even when provided with full rides toward tuition, students often need to borrow loans to cover their costs of living. But she added that this debt burden is less of a problem at Yale because of institutional scholarships and the school’s unique loan forgiveness program: the Career Options Assistance Program. Established in 1989, COAP funds all debts for law school graduates with annual incomes under $50,000, and a portion of the debts for alumni earning higher incomes. The higher the income, the more an alum is expected to contribute towards his or her student loans.

“We kind of pride ourselves on COAP,” Stone said. “It allows our graduates to follow their dreams … We don’t want loan repayment to drive their life. We want their life to drive loan repayment.”

What makes COAP different from loan repayment assistance programs at other schools is that it is strictly income-based, Stone said, adding that programs at other schools only give assistance to students entering the public service and nonprofit sectors.

She added that unlike other law schools, Yale Law School recognizes that students face loan debts and provides counseling to cater to specific needs. For example, every graduate is offered a one-on-one consultation with the financial aid staff for suggestions on loan repayment, Stone said.

Law School spokesperson Janet Conroy said besides offering these individual sessions, the school also runs various workshops to boost financial literacy, covering topics ranging from retirement to insurance. It also has a popular financial aid blog that offers relevant tips, she added. The tips range from how to live on a budget to where to buy apartment furniture.

Conroy said the school’s small size enables it to invest in such close, individualized assistance that is impossible at larger schools.

Georgetown Law School Dean William Treanor LAW ’86 said his school pays for a student’s loan if the student works in the public interest sector. Alumni earning below $75,000 annually receive the maximum benefit, and those benefits continue on a diminishing basis for incomes above $75,000, according to the school’s financial aid website.

Michelle Deakin, managing director of Media Relations & Public Information at Harvard Law School, said the school also has its own loan assistance program. Harvard’s Low Income Protection Plan relieves the burden of education loan repayment for law school graduates working full-time in government, nonprofit or academic jobs.

In addition to school-specific loan assistance, the Public Service Loan Forgiveness Program — a federal aid program — eliminates federal student loan debt for those working full-time in public service after one makes 120 monthly payments.

“A lot of people don’t enter law school because they think they will never be able to pay the debt, but the federal program, along with programs at different schools, makes it possible [for students] to enter public interest and not worry about their debts,” Treanor said.

However, Stone said the federal program is “very much in jeopardy” due to lack of funding. She added that there have been proposals to eliminate the program. President Barack Obama’s 2015 budget proposal to Congress proposed capping the program at $57,500 for all new borrowers, while Republicans continue to push for the full elimination of the program.

Because COAP is independent of the federal program, Yale law students need not worry about the potential elimination of the program, Stone added.

Kyle McEntee, executive director of Law School Transparency, a nonprofit advocacy organization that generates reports aimed at making legal education and profession more transparent, said while Yale has the COAP, loan repayment assistance is rare among less elite schools. Therefore, students at those schools face higher debt burdens.

WITH PRESTIGE, LOWER RISKS?

In her book, Rhode notes that law school graduates face increasing competition in the legal job market, which results in difficulty for students trying to repay their debts. However, elite law schools are more likely to have their alumni find jobs after graduation, Rhode told the News.

McEntee said all law schools are “priced too high,” but the problem is different at elite law schools such as Yale’s. Students at non-elite schools are taking on a lot of risk when entering law school because they may not pass the bar exam. Law students at Yale and other top law schools face this risk less often, he added.

“Reputation of the school is very helpful in a profession obsessed with prestige,” McEntee said.

In December 2012, McEntee published an article in the Huffington Post rebutting a November 2012 op-ed by Lawrence Mitchell, then-dean of Case Western Reserve University’s law school. In Mitchell’s writing, he argued that practicing law pays off over the long term and that the graying of baby-boom lawyers creates career opportunities for law school graduates.

McEntee, however, argued in his article that law students are still burdened by heavy debts and the crunch for lawyer jobs continues to worsen.

Treanor agreed that students’ job prospects in the profession have to do a great deal with the reputation of the school. Since the U.S. News and World Report started ranking law schools about 25 years ago, the top 14 schools have almost remained the same every year, Treanor added. Yale Law School was ranked first by U.S. News and World Report earlier this year.

Some external surveys and employment statistics discount graduates who go into academics and law teaching after graduation, which many at Yale Law do, Conroy said. Some surveys do not count fellowships as being employed, but many students take a clerkship upon graduation, which is why Yale Law School has been ranked top on those lists, Conroy added.

According to Yale Law School’s employment statistics for 2014, two of 230 graduates of the class of 2014 are seeking jobs but are unemployed. Three are not seeking employment and four deferred their job start date.